SNB could unwind tiering, but gain ‘not obvious’, Martin says
Vice-chairman defends Switzerland’s tiered approach to ample reserves
The Swiss National Bank (SNB) could phase out the tiered system it uses to steer short-term rates by paying the same interest rate on all banks’ reserves, but it would gain little from doing so, its vice-chairman has said.
At a panel on the future of liquidity at the Czech National Bank conference in Prague on October 6, Antoine Martin said the benefits of scrapping Switzerland’s tiered reserve system were “not obvious”, given that it worked “remarkably well”.
Under the tiering system, banks earn
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